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Group aims to reform long-term care before the problem explodes

And you thought getting Obamacare passed was a big deal.

An ambitious proposal to significantly change the way the United States deals with and finances providing long-term care to ailing people was unveiled Monday by a group that warns the already pricey problem is set to become much more expensive and affect many more people in coming decades.

The proposals come at a time when experts say many, if not most Americans will be unable to personally pay the costs of the long-term care they might need, leaving their children and government programs such as Medicaid to pick up the large financial slack.

Long term care insurance
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"We believe the current system of financing [long-term services and supports] is inadequate, especially for those with high levels of need," the Long-Term Care Financing Collaborative said in a report detailing its proposals.

"It puts an enormous burden on family members and friends, often results in poor care, and frequently causes preventable harm that endangers recipients of care and their caregivers, and increases medical costs."

The Long-Term Financing Collaborative is project of Convergence, a Washington-based nonprofit founded in 2009 to address pressing social and policy issues. The collaborative's report noted that more than 6 million older adults currently need high levels of care, and that the number of such adults is expected to grow to 16 million in the next 50 years.

About half of all people over the age of 65 will need such care before they die, and the typical recipient will need that assistance for two years at an average total cost of $140,000, according to the collaborative, which is comprised of policy analysts, consumer advocates and officials from the long-term care industry.

The collaborative said the "hybrid public/private insurance approach" it calls for would "prevent gaps between Medicaid and the private market," and better protect millions of people from the risk of being impoverished by long-term care needs.

The centerpiece of the proposal is creating a "universal catastrophic insurance program" which would give financial aid to people with high levels of care needed over long periods of time, after taking into account their lifetime income. Such an insurance program would require contributions from all working Americans, and could come in the form of a payroll tax, an income tax or another revenue stream.

Another major recommendation is to "modernize" the long-term care safety net that is already provided by Medicaid for people with limited incomes who aren't able to save in advance for the care they will need, and for people whose assets end up being depleted by their care costs.

Because of the high costs of long-term care, many people fall into that category. The collaborative notes that 15 percent of the people who need long-term care will incur more than $250,000 in costs.

Other key recommendations include a series of private initiatives and public policies that would revitalize the current long-term care insurance market — which currently covers less than 10 percent of people over the age of 65 — so that more people are protected from the financial risk of needing such care. Long-term care insurance can prove to be too expensive for many people, is difficult for some to understand and is offered by considerably fewer companies than it had been in the past.

The collaborative also wants to give families and communities more support to help people get long-term care at home, as opposed to in an institution.

The proposals outlined Monday would be ambitious at any time. But they face particularly high hurdles given the current political climate in Washington.

The Republican-controlled Congress has repeatedly tried to repeal President Barack Obama's Affordable Care Act, which mandated that all Americans have some form of health insurance or pay a tax penalty. The GOP House and Senate has otherwise shown little appetite for cooperating with the Democratic-controlled White House on major policy initiatives, particularly ones that would expand or reform the social safety net.

Is passing these proposals a political long shot? "Yeah, it is," said collaborative member Howard Gleckman.

"But it's a big problem, and it's a problem that we've got to fix," said Gleckman, a senior fellow in the Urban-Brookings Tax Policy Center at the Urban Institute.

Gleckman noted that members of the collaborative include people from across the political spectrum, and that the group "talked a lot about whether we wanted to" tailor its proposals according to the political landscape.

But "what we discovered," he said, is "you couldn't fix this with half measures."

"It's not that we didn't take politics into account. But there's no other way to do it," Gleckman said.

He also noted that "next year there's going to be a new president and a new Congress, and this problem is not going to go away."

Gleckman said that while some people might not want "another government program" created to pay for long-term care, the fact is "the government is already paying for it," in the form of Medicaid. About half of the 3.8 million people who get long-term care services and support from Medicaid are 65 years of age and older, and cost the program between $75 billion and $80 billion annually.

The collaborative's report said that a universal, public catastrophic insurance program for long-term care would reduce Medicaid costs to the federal and state governments.

"You can not only save a lot of money, you can also do good things for people," Gleckman said of the proposals. "There really are good reasons to do this. It's a matter of creating the environment to do it."